Tech industry giant TCS (Tata Consultancy Services) has kicked off the earnings season with a 28.5 per cent rise in net profit to Rs 9,008 crore, compared to Rs 7,008 crore profit in the same period last year. TCS' net profit on QoQ basis, however, declined 2.6 per cent.
The first quarter earnings of the IT bellwether also failed to impress analysts as TCS fared below their expectations. ICICI Securities had expected TCS' net profit to rise by 35.7 per cent year-on-year to Rs 9,512.6 crore. Global brokerages Nomura and HSBC had seen profit after tax rise 33 per cent and 33.5 per cent to Rs 9,320.2 crore and Rs 9,356, respectively.
TCS' consolidated revenue from operations rose 18.5 per cent to Rs 45,411 crore. The revenue in dollar terms stood at $6.154 billion, while total contract value stood at $8.1 billion.
TCS' EBIT (earnings before interest and taxes) in rupees declined 2.1 per cent QoQ to Rs 11,588, and EBIT margin stood at 25.5 per cent compared to 27.07 per cent in the previous quarter. On a sequential basis, TCS' currency topline grew 4.1 per cent for the first quarter. The topline growth in rupee terms rose 3.9 per cent.
TCS' operating margin dropped primarily due to a salary hike announced in the previous quarter whose full impact was seen in Q1 FY22. TCS board has also declared an interim dividend of Rs 7 per equity share of Re 1 each.
"I am humbled that in a personally challenging quarter to many, TCSers demonstrated phenomenal character in helping each other, be meaningful to the communities and delivered on our commitments to clients. On that backdrop, our business in North America, BFSI and Retail all showed an appreciable growth which underlines the resilience of our operating model, the relevance of our offerings and above all, the passion and dedication of our associates," TCS CEO and MD Rajesh Gopinathan said.
Gopinathan said given the variants of the virus and fears of a potential third wave, TCS is watchful of the emerging situation and remains optimistic about the opportunities in its core markets and verticals.
For the March quarter of FY21, the company had reported a 14.9 per cent increase in consolidated net profit to Rs 9,246 crore from Rs 8,049 crore in the year-ago period. TCS had posted a 0.27 per cent increase on an annual basis in consolidated net profit for the financial year ended March 31, 2021, at Rs 32,430 crore.
Share of Tata Consultancy Services (TCS) was trading flat ahead of the IT firm's first quarter set to be announced today. TCS stock fell 0.12 per cent to Rs 3,271 against previous close of Rs 3,275.30 on BSE during the day. The share closed 0.67 per cent to Rs 3,253 on the NSE.
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